Bitcoin price analysis: Staging reversal around $6,500; the SEC announces a review of denied ETFs

Bitcoin bulls seem to have been lured into a reversal pattern following the jump above $6,500. The price has ignored the recent predictable US Securities and Exchange Commission’s decisions concerning Bitcoin ETFs approvals. Bitcoin surged above $6,500 before culminating in a breakdown back to the levels it were at $6,400.

In the meantime, Bitcoin is trading marginally below $6,500 following a slight correction from the yesterday’s highs at $6,541. The 38.2% Fib retracement level between the last high of $6,893.23 and a low of $6,225.13 close to $6,481.04 is offering immediate support. In addition to that, the 50 15-minutes simple moving average is reinforcing this support area. A second support is highlighted at $6,400, which also happens to be the 100-day simple moving average.

Bitcoin price is also trading in a contracting triangle pending a breakout. The triangle resistance is limiting gains towards the next resistance target at $6,550. Further up, buyers have their eyes on the upper supply zone at $6,659.65. A reversal appears to be in progress and if the 50 SMA support fails to hold, BTC/USD will test the support at $6,400. Moreover, if the contracting triangle support is broken, Bitcoin could drop further towards the primary support at $6,250.

At present, the path of least resistance is upward sideways. The relative strength index (RSI) is ranging horizontally at the 49% mark. However, Bitcoin buyers must ensure that the short-term support at $6,480 is not broken.

In other news, the SEC has announced that it is going to carry out a review of the 9 denied Bitcoin ETFs proposals. As previously reported by FXStreet, SEC issued denial orders to proposals from three exchange firms; Proshares, GraniteShares and Direxion. The proposals will be reviewed by senior commissioners but the timeframe for the exercise remains unspecified. SEC secretary Brent Fields in a letter addressed to NYSE Group senior counsel David De Gregorio said:

“This letter is to notify you that, pursuant to rule 43 I of the commission's rules of practice, 17 CFR 20 I .43 1, the commission will review the delegated action. In accordance with rule 431 (e), the August 22 order is stayed until the commission orders otherwise." Fields added, "The Office of the Secretary will notify you of any pertinent action taken by the Commission."

The review announcement was made by Hester Peirce; a commissioner who was reported to have dissented the previous denied proposal for ETF by Cameron and Tyler Winklevoss. Peirce wrote:

“The Commission (Chairman and Commissioners) delegates some tasks to its staff. When the staff acts in such cases, it acts on behalf of the Commission. The Commission may review the staff's action, as will now happen here,"

BTC/USD 15-minutes chart